[Congressional Record (Bound Edition), Volume 155 (2009), Part 12]
[Senate]
[Pages 15842-15843]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              HEALTH CARE

  Mr. ALEXANDER. Mr. President, this morning one of our bipartisan 
breakfasts occurred which we have here every so often. Senator 
Lieberman and I and other Senators organized it. 16 Senators there 
attending this morning's breakfast. The Presiding Officer is often a 
participant in those meetings. At this morning's breakfast we discussed 
health care. As we listened to the chairman, ranking member, and other 
senior members of the Finance Committee one of the things we said is 
that we agree on about 80 percent of what needs to be done.
  But one of the areas where we do not agree is cost. Another area is 
whether a so-called government-run insurance option will lead to a 
Washington takeover of health care. A lot of us are feeling like we 
have had about enough Washington takeovers: our banks, our insurance 
companies, our student loans, our car companies, even our farm ponds, 
and now health care.
  Government-run insurance is not the best way to extend coverage to 
low-income Americans who need it. The chairman of the Finance Committee 
indicated that his bill would be paid for. But on the Health, 
Education, Labor, and Pensions Committee, on which I serve, that is not 
the case. The bill is not even finished yet, and already, as the 
Senator from New Hampshire has pointed out, in the 5th through the 14th 
year, 10 years, it would cost 2.3 trillion new dollars, raising the 
Federal debt to even further unimaginable levels.
  Let me mention an aspect of cost which is often overlooked. Federal 
debt is certainly a problem, but as a former Governor, I care about the 
State debt and State taxes. The States do not have printing presses, 
they have to balance their budgets. So when we do something up here 
that puts a cost on States down there, they have to raise taxes or cut 
programs.
  We know the programs they have to cut: education, and health care 
programs, both are important to people in Illinois and people in 
Tennessee.
  The Medicaid Program in the Kennedy bill that we are considering 
would increase Medicaid to 150 percent of the Federal poverty level, 
which sounds real good until you take a look at the cost.
  In Tennessee alone, if the State had to pay its share of the 
requirement, about one-third, that would be $600 million. It would be 
another $600 million if, as has been suggested, it is required that the 
State reimburse physicians up to 110 percent of Medicare. So that is 
$1.2 billion of new costs just for the State of Tennessee.
  The discussion has been that the Federal Government will take that 
over for a few years and then will shift that back to the States. Well, 
my response is that every Senator who votes for such a thing ought to 
be sentenced to go home and serve as Governor of his or her State for 8 
years and figure out how to pay for it or manage a program like that.
  In our State, we talk about money. Up here, a trillion here, a 
trillion there. But $1.2 billion in the State of Tennessee equals to 
about a 10-percent income tax on what the people of Tennessee would 
bring in. We do not have an income tax. So that would be a new 10-
percent income tax.
  So one of my goals in the health care debate is to make sure we do 
not get carried away up here with good-sounding ideas and impose huge, 
unfunded mandates on the States, which, according to the tenth 
amendment to the Constitution, we are not supposed to. But we 
superimpose our judgment upon the Governors, the legislators, the 
mayors, the local politicians who are making decisions about whether to 
spend money to lower tuition or improve the quality of the community 
college or provide this form of health care or build this road or 
bridge. That is their decision. And if we want to require something, we 
should pay for it from here.
  I am going to be very alert on behalf of the States and the citizens 
of the States to any proposal that would shift unfunded mandates on 
State and local governments. I hope my colleagues will as well.
  My suggestion to every Governor in this country is, over the next few 
days, to call in your Medicaid director, ask that Medicaid director to 
call the Senate and say: Tell us exactly how much the Kennedy bill and 
the Finance Committee bill will impose in new costs on our State if the 
costs are shifted to the States. Then when we come back at the first of 
July, we can know about that cost.
  The ACTING PRESIDENT pro tempore. The Senator has used 5 minutes.
  Mr. ALEXANDER. I thank the Chair very much. So my interest is not 
just in additions to the Federal debt but not allowing unfunded 
mandates to the States.
  I ask unanimous consent to have printed in the Record an article from 
the New York Times from June 22, 2009, showing what condition the 
States are in. Almost all are in a budget crisis and not in any 
position to accept this.
  I also would like to thank the Senator from Arizona for allowing me 
to go ahead of him so I can go to the committee and offer an amendment.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                [From the New York Times, June 22, 2009]

            States Turning to Last Resorts in Budget Crisis

                          (By Abby Goodnough)

       In Hawaii, state employees are bracing for furloughs of 
     three days a month over the next two years, the equivalent of 
     a 14 percent pay cut. In Idaho, lawmakers reduced aid to 
     public schools for the first time in recent memory, forcing 
     pay cuts for teachers.
       And in California, where a $24 billion deficit for the 
     coming fiscal year is the nation's worst, Gov. Arnold 
     Schwarzenegger has proposed releasing thousands of prisoners 
     early and closing more than 200 state parks.

[[Page 15843]]

       Meanwhile, Maine is adding a tax on candy, Wisconsin on oil 
     companies, and Kentucky on alcohol and cellphone ring tones.
       With state revenues in a free fall and the economy choked 
     by the worst recession in 60 years, governors and 
     legislatures are approving program cuts, layoffs and, to a 
     smaller degree, tax increases that were previously 
     unthinkable.
       All but four states must have new budgets in place less 
     than two weeks from now--by July 1, the start of their fiscal 
     year. But most are already predicting shortfalls as tax 
     collections shrink, unemployment rises and the stock market 
     remains in turmoil.
       ``These are some of the worst numbers we have ever seen,'' 
     said Scott D. Pattison, executive director of the National 
     Association of State Budget Officers, adding that the federal 
     stimulus money that began flowing this spring was the only 
     thing preventing widespread paralysis, particularly in the 
     areas of education and health care. ``If we didn't have those 
     funds, I think we'd have an incredible number of states just 
     really unsure of how they were going to get a new budget 
     out.''
       The states where the fiscal year does not end June 30 are 
     Alabama, Michigan, New York and Texas.
       Even with the stimulus funds, political leaders in at least 
     19 states are still struggling to negotiate budgets, which 
     has incited more than the usual drama and spite. Governors 
     and legislators of the same party are finding themselves at 
     bitter odds: in Arizona, Gov. Jan Brewer, a Republican, sued 
     the Republican-controlled Legislature earlier this month 
     after it refused to send her its budget plan in hopes that 
     she would run out of time to veto it.
       In Illinois, the Democratic-led legislature is fighting a 
     plan by Gov. Patrick J. Quinn, also a Democrat, to balance 
     the new budget by raising income taxes. And in Massachusetts, 
     Gov. Deval Patrick, a Democrat, has threatened to veto a 25 
     percent increase in the state sales tax that Democratic 
     legislative leaders say is crucial to help close a $1.5 
     billion deficit in the new fiscal year.
       ``Legislators have never dealt with a recession as 
     precipitous and rapid as this one,'' said Susan K. Urahn, 
     managing director of the Pew Center on the States. ``They're 
     faced with some of the toughest decisions legislators ever 
     have to make, for both political and economic reasons, so 
     it's not surprising that the environment has become very 
     tense.''
       In all, states will face a $121 billion budget gap in the 
     coming fiscal year, according to a recent report by the 
     National Conference of State Legislatures, compared with 
     $102.4 billion for this fiscal year.
       The recession has also proved politically damaging for a 
     number of governors, not least Jon Corzine of New Jersey, 
     whose Republican opponent in this year's race for governor 
     has tried to make inroads by blaming the state's economic 
     woes on him. Mr. Schwarzenegger, who sailed into office on a 
     wave of popularity in 2003, will leave in 2011--barred by 
     term limits from running again--under the cloud of the 
     nation's worst budget crisis. And the bleak economy has 
     played a major role in the waning popularity of Gov. David A. 
     Paterson of New York.
       Over all, personal income tax collections are down by about 
     6.6 percent compared with last year, according to a survey by 
     Mr. Pattison's group and the National Governors Association. 
     Sales tax collections are down by 3.2 percent, the survey 
     found, and corporate income tax revenues by 15.2 percent. 
     (Although New Jersey announced last week that a tax amnesty 
     program had brought in an unexpected $400 million--a windfall 
     that caused lawmakers to reconsider some of the deeper cuts 
     in a $28.6 billion budget they were set to approve in advance 
     of the July 1 deadline.)
       As a result, governors have recommended increasing taxes 
     and fees by some $24 billion for the coming fiscal year, the 
     survey found. This is on top of more than $726 million they 
     sought in new revenues this year.
       The proposals include increases in personal income tax 
     rates--Gov. Edward G. Rendell of Pennsylvania has proposed 
     raising the state's income tax by more than 16 percent, to 
     3.57 percent from 3.07 percent, for three years--and tax 
     increases on myriad consumer goods.
       ``They have done a fair amount of cutting and will probably 
     do some more,'' said Ray Scheppach, executive director of the 
     governors association. ``But as they look out over the next 
     two or three years, they are also aware that when this 
     federal money stops coming, there is going to be a cliff out 
     there.''
       Raising revenues is the surest way to ensure financial 
     stability after the stimulus money disappears, Mr. Scheppach 
     added, saying, ``You're better off to take all the heat at 
     once and do it in one package that gets you through the next 
     two, three or four years.''
       While state general fund spending typically increases by 
     about 6 percent a year, it is expected to decline by 2.2 
     percent for this fiscal year, Mr. Pattison said. The last 
     year-to-year decline was in 1983, he said, on the heels of a 
     national banking crisis.
       The starkest crisis is playing out in California, where 
     lawmakers are scrambling to close the $24 billion gap after 
     voters rejected ballot measures last month that would have 
     increased taxes, borrowed money and reapportioned state 
     funds.
       Democratic legislative leaders last week offered 
     alternatives to Mr. Schwarzenegger's recommended cuts, 
     including levying a 9.9 percent tax on oil extracted in the 
     state and increasing the cigarette tax to $2.37 a pack, from 
     87 cents. But Mr. Schwarzenegger has vowed to veto any budget 
     that includes new taxes, setting the stage for an ugly battle 
     as the clock ticks toward the deadline.
       ``We still don't know how bad it will be,'' Ms. Urahn said. 
     ``The story is yet to be told, because in the next couple of 
     weeks we will see some of the states with the biggest gaps 
     have to wrestle this thing to the ground and make the tough 
     decisions they've all been dreading.''
       In one preview, Gov. Tim Pawlenty of Minnesota, a 
     Republican, said last week that he would unilaterally cut a 
     total of $2.7 billion from nearly all government agencies and 
     programs that get money from the state, after he and 
     Democratic legislative leaders failed to agree on how to 
     balance the budget.
       In an example of the countless small but painful cuts 
     taking place, Illinois announced last week that it would 
     temporarily stop paying about $15 million a year for about 
     10,000 funerals for the poor. Oklahoma is cutting back hours 
     at museums and historical sites, Washington is laying off 
     thousands of teachers, and New Hampshire wants to sell 27 
     state parks.
       Nor will the pain end this year, Ms. Urahn said, even if 
     the recession ends, as some economists have predicted. 
     Unemployment could keep climbing through 2010, she said, 
     continuing to hurt tax collections and increasing the demand 
     for Medicaid, one of states' most burdensome expenses.
       ``Stress on the Medicaid system tends to come later in a 
     recession, and we have yet to see the depth of that,'' Ms. 
     Urahn said. ``So you will see, for the next couple years at 
     least, states really struggling with this.''

  The ACTING PRESIDENT pro tempore. The Senator from Arizona is 
recognized.

                          ____________________